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tv   Nightly Business Report  PBS  October 5, 2017 5:00pm-5:31pm PDT

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this is "nightly business report" with ty. the charging bulls. stocks have had their longest streak of closing records in 20 years, as the major averages keep on climbing. speedy delivery, an area dominated by fedex and ups. but if amazon has its way, that may be about to change. buying a home with no money of your own? a new company wants to help you clear the hurdles of homeown good evening, everyone, and welcome. an historic day for investors, the s&p 500, one of the broadest, most widely followed measures of the stock market, closed at a record, again, for the sixth straight day, making
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it the longest streak of record closes in 20 years. that of course no small feat. investors are optimistic about broad economic growth both here and abroad. they're encouraged by corporate earnings and the prospect of u.s. tax reform hasn't hurt either. today the dow jones industrial avere rallied 113 points to 22,775. the nasdaq added 50. that s&p 500 was up 14. bob pisani has more on wall >> reporter: the record rally rolls on. the s&p 500 closed higher for an eighth straight day. it makes it not only the index's longest winning streak, it's also the longest string of record closes. the markets ticked higher on news that the house voted to approve the republicans' laters push for a budget resolution. that will now go to the senate,
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setting the stage for tax reform. with tax reform back on the table, banks, material, and energy stocks were all back up. since the presidential election last november, five sectors are up more than 20%. tech, industrials, and health care among them. one sector, defense stocks, outpaced them all, up almost 40% since trump took office. what's going on? the economy is continuing to grow. we saw proof of that, the most blowout numbers in manufacturing in services this week. earnings are also still on a solid footing. the market is going to keep melting up in the absence of any major shock factor. could throw the markets for a loop? north ko a more aggressive fed chair than the markets like, or a tax reform bill that fails. but right now the markets aren't afraid of any of that. for "nightly business report," i'm bob pisani at the network stock exchange. hugh johnson has seen his fair share of winning streaks is here to talk about the record
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run in stocks, now that the s&p has reached its current levels. welcome back, hugh. >> thank you very much, sue, nice to be with you. >> what do you make of this record run? and does it portend to you that perhaps we're in that bubble formation? or maybe not? >> yeah, no, obviously it's world of superlatives when we look at the financial markets. i think the real issue right now, for me anyway, is there's a seeming disconnect. yes, the economy is growing. but the stock market is doing much better than the economy would really allow, and quite frankly, that's because earnings have been so good. now, the question is, is this therefore a speculative bubble? i would have to answer that question, no, it's not a speculative bubble, sue, because kind of a defining characteristic of a bubble,
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which includes valuation being very extreme, i don't think that's the case. lots of leverage or borrowing in order to buy stocks, i don't think that's the case. and probably the most puzzling feature of all, sue, really is the fact that we don't have widespread optimism or euphoria. in fact it's quite subdued. everything is quite subdued. everybody is quite calm. quite frankly, i don't think this is a bubble. i think this is simple a bull market. but certainly one with a lot of superlatives attached. >> we certainly have been beneficiaries of good fortune here over the past seven, eight, nine, ten years, almost. but bear markets are not dead and gone. what could cause one, hugh? >> you know, that's a great question. i think that usually when i look back at financial market history, tyler, i see a couple of things that combine to do that. most importantly, of course, is that interest rates go up as the federal reserve becomes concerned about a strong
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economy, and particularly rising inflation. quite frankly, as you know, the interest rates, even though they're starting to rise, are still at levels which we would call historically fairly low. and usually, often that's combined with some move towards fiscal restraint, which really means increasing taxes, reducing spending. and we've got anything but that. in fact prospects are now for tax reductions if they can get that through congress. so you don't have the combination now. but watch out, watch the federal reser wat interest rates, and watch washington, if they get unnerved that the deficits are fairly l start to reduce spending. >> thanks so much for spending time with us, hugh johnson with hugh johnson advisers. as we mentiod and as hugh just echoed, lower taxes is one of the issues lifting the market. as bob pisani reporteden, the house today passed a $4 trillion
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budget bill, initiating a process that republicans hope will result in the enactment of tax reform this year. a senate panel voted to send a budget measure to the senate floor for a full vote. when that happens, it formally starts the process of so-called reconciliation, during which lawmakers could pass a sweeping tax reform bill with a simple majority of 51 votes in the senate instead of the usual 60-vote requirement. the white house has asked congress for $29 billion in additional hurricane relief. the request comes a month after lawmakers approved a first installment of $15 billion in aid. billions more will likely be requested as puerto rico assesses the damage from hurricane maria. there is also money being requested for wildfires rampant in western states. the president of the philadelphia fed has pencilled in an interest rate hike for
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later this year. that view comes despite a tepid outlook for economic growth which he says will remain around 2% unless lawmakers come up with a tax plan to boost the economy. patrick harker also pointed to another issue he says is hold >> one of the limiting factors, i would argue probably the limiting factor right now, in growth in the economy is n capi small businesses that's an issue. it's the inability to get the skilled workers. there's a mismatch between what companies need and what workers know is real and growing. >> president harker added that workforce development should not be viewed as a social service but as an economic investment. and sticking with the job market, the number of americans filing for unemployment benefits fell more than expected last week. initial jobless claims dropped 12,000 to a seasonally adjusted 260,000, although some of data is muddied by hurricanes harvey and irma.
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economists expect non-farm payrolls to increase by 80,000. the unemployment rate is expected to stay steady at 4.4%, and average hourly wages are forecast to inch higher. companies are planning few job cuts. the outplacement firm challenger gray and christmas says the number of potential layoffs is down 27% from last year. even as employers hold on to existing workers, the report states that many positions requiring skilled labor are going unfilled. but one sector that is hiring a lot is health care. the unemployment rate for the industry is well below the national average. and that's making it harder for hospitals and other firms to fill some jobs. bertha coombs has our story. >> reporter: vivian left a human resources job last year to become a home health aide for better pay and other rewards. >> it's not financial gains. to me, when you're appreciated
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by a client, as well as, you know, the person who employed you, it's more than anything. >> reporter: as americans are living longer, demand for home health care workers is growing. for home health firms, so is the competition to find them. >> we're having to open up our pipeline. we're having to think innovatively. we're looking at ways to certainly help with not only benefits and pay, but also just to provide even a better experience for our care workers in general. >> reporter: they're not alone. hospital unemployment is now just 1.4%. at health centers like ohio health in columbus, they're looking more at incentives like student loan health in order to attract and retain doctors. >> one of our recruiters was working with a hospitalist that had student loan debt. that's a pain point for physicians who are practicing. >> reporter: while uncertainty over health care regulation in
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washington has given some health executives pause, hospital hiring has slowed in recent months, partly because of a shortage of workers, especially when it comes to doctors and nurses. it now takes a record 49 days to fill a health care position, according to dhi group consulting, two weeks longer than the highly competitive i.t. sector. more employers are trying to train and grow their workforce. >> the most innovative are the ones that are adding to their portfolios and really going out and having an ongoing dialogue in the community, pipe lining people, understanding who is in the market. >> reporter: according to them early. >> we're recruiting right now several urologists that are not going to be available until september of 2019. but we're actively working with them. >> reporter: and hoping that like vivian, they'll feel that connection to their team. bertha coombs, "nightly business report." still ahead, get on board. would you fly in an electric
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plane? how about one without a pilot? the future of air travel is changing q. one of the nation's largest health insurers will stop covering an opioid pin killer. significant in cigna has pledged to cut opioid use by 2019. for years, fedex and ups have ruled the delivery business. amazon is trying to change that, building a hub for its own cargo
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airline. and there are now reports that the company is even venturing into the ocean freight business. now it's reportedly testing a new program that can more quickly deliver an additional number of items sold on amazon's website. morgan brennan has more on amazon's latest push into the territory of fed >> reporter: amazon is diving deeper into the delivery business. the e-commerce giant is reportedly testing a new service in the u.s. that would target independent sellers that participate in amazon's prime two-day shipping program. amazon would manage package delivery, bypassing their own system of warehouses. fedex and ups would still make the deliveries, but amazon would be calling the shots. analysts an investors are missing the bigger picture. >> amazon is doing what larger
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retailers do, they build out their own infrastructure. walmart has 8,000 trucks, 30,000 trailers, dozens and dozens of distribution centers, yet they're still the largest customer for eve mainjor trucker 0 you tell there. >> reporter: for ups and fedex, e-commerce respects a fifth of all business, with amazon a fraction of that. it's a dynamic that we discussed last week. >> we pick up and transport and deliver things from 220 countries in the world, from billions of people and millions of businesses, one to the other. they seem like they're the same. when you get your package. but what's going on upstream is remarkably different. >> reporter: in response to today's report, fedex adding that there seems to be a clear misunderstanding of the scale, infrastructure, and complexity involved in running a transportation network. they say they expect to expand
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relationships in the future. as for amazon, the company is using the same carrier partners to offer this program as it's used for years, including ups, the u.s. postal service, and fedex. all of which is to say, bringing more management of prime offerings in-house is the next logical step, one that helps amazon better manage its shipping costs since it can negotiate lower rates, and better plan for surges in demand, especially since each holiday season delivers new shipping record. for "nightly business report," i'm morgan brennan. general motors has more than doubled its self-driving car fleet in california. the company is testing vehicles in san francisco as part of an effort to develop software capable of navigating congested big city streets. the automaker also reported more run-ins between autonomous vehicles and human operated ones but said all of the incidents were caused by the human driver. >> blame it on the other guy. >> yes. automakers have been testing, obviously, those
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self-driving cars for some time now. but they're also investing in electric cars. and now the aviation industry is looking to test those technologies in the air. it could lead to a dramatic change in how we travel. phil lebeau takes a look a. >> reporter: this is the zunum arrow. while this animation shows a plane that looks like other small jets, it's different. it's a hybrid electric plane. >> this aircraft can allow you to bypass the hub system on short regional flights and get you to your destination two to four times faster than you do today at prices below commercial. >> reporter: the zunum aero seats a dozen people and flies primarily on battery power, meaning 80% lower emissions and noise levels. the funding comes in part from jetblue and boeing. while boeing isn't getting out of building commercial
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airplanes, it is looking at new technology that could change how the world flies. for example, it's buying aurora flight sciences, which develops technologies for autonomous aircraft and robotic cockpits. aerospace isr a flight four-person air taxis that could eventually fly without a pilot. is the public ready to get on board with all of this? after all, flying is still an uncomfortable experience for many people. but the folks at zunum aero things folks will have no problem flying in this plane. >> everyone by 2020 will have ridden in an electric car or bus. it will be a nonissue. >> reporter: the future of flight taking off in a new direction. phil lebeau,
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investors raise a glance to constellation brands. that's where we begin tonight's market focus. the brewer reported better than expected quarterly results, helped by strong demand and higher beer prices. the owner of corona and modello said its business accounted for more than 60% of the growth in high end beer sales in the u.s. during the quarter. constellation's shares rose 4% to $209.25. the international trade commis said imports of foreign-made washing machines are hurting domestic manufacturers. the decision comes after whirlpool filed a petition against korean competitors samsung and lg. the commission will give its remedy recommendation which could include increased duties on samsung and lg. president trump will make the final decision. whirlpool shares were off 1%. drug maker omeros said it reached a settlement with rival endo international that delays
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endo from marketing a generic version of their eye drug until 2032. shares of omeros were up. endo's shares fell 2%. pennsylvania's attorney general is suing the student loan provider navian, alleging the company pushed loans to borrowers who they knew were at risk of defaulting. the government says it cost loan holders $4 billion. navian says the allegations are unfounded. their shares are down to $12.61. sears were borrow again from its owner, eddie lampert. it will borrow $100 million from lampert's hedge fund, bringing the total sears has borrowed from lampert to just under $500 million. shares rose to $7.29. casino operates penn
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national gaming and pinnacle international are reportedly considering a merger. the two companies have not agreed on the terms of a deal but penn national is interested in buying pinnacle. both companies gained. and after the bell, costco reported profits and revenue that beat street estimates. the company also saw same store sales rise at a faster pace than analysts expected. shares were initially lower in after hours trading but they did finish the regular session up 1% at $167.07. mortgage rates are holding steady. that's good news for prospective homebuyers since they are at historically low levels. the 30-year fixed rate average is now 3.85%. many say the short term economic impact of the hurricanes will keep mortgage rates in a holding pattern since they closely track the ten-year treasury yield. ask most young renters today
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and they'll tell you that while they would like to own a home, saving for the down payment is harder than ever. high home prices, steep levels of student debt have seen to that. what if you could get others to help you like crowdfund your down payment? diana olick takes a look at this new way to buy a home with no money down of your own. >> reporter: today's young americans are more social, more willing to share. but will they help each other buy homes? that is the bet one mortgage learn is banking on as it launches the first program to allow homebuyers to crowdfund their down payment. >> this allows you to tell your story. it allows folks to buy into the story of what it is you have, your loan story, your home story. and one of the things our tag line is, fund your way home. >> reporter: cmg financial, a mortgage lender, is launching home fund me, an online platform to give homebuyers a way to market their needs and receive
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multiple tax-free gifts from anyone to finance the down payment on a home. previously lenders limited down payment assistance to close family members, employers, nonprofits and religious organizations, all with significant documentation. this pilot program has the blessing of fannie mae and freddie mac which finance the vast majority of mortgages today. >> we're trying to test and learn a variety of solutions. the preferences for today's homebuyers have changed significantly. and there's no silver bullet to solving a problem that's as hard as how do you find a down payment. >> reporter: millennials are not only saddled with high levels of student loan debt, they're also paying very high rent, which makes saving harder. but they're also starting to get married and have children. >> of course we see the wedding registries. you're going to spend $250 on a coffee making machine? if that $250 goes to a down payment of your home, at the very least, at the very least, i improved your quality of life.
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>> reporter: one red flag in the plan is skin in the game. if you're crowdfunding the down payment, and then getting a mortgage, are you really invested in the home? in the loan crisis, people walked away from their mortgages because they had nothing to lose. >> if you pay for your closing costs, is it skin in the game? would you rather have somebody have a lot of money in the bank after they buy the home and no down payment, or the opeposite? we still have a lot of questions and things to learn when it comes to the role of down payments. >> reporter: that's why this is a test program to see not only if the crowd is willing to fund home buying, but only if homeowners see that giftor it's worth. for "nightly business report," i'm diana olick in washington. coming up, content is king. but which company will w
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netflix will hike prices. the streaming video company now charges a dollar more a month for its most popular plans. the price hikes will go into effect today for new subscribers. current subscribers will soon get an e-mail from netflix and will see their rates go up next month. netflix making a big push, as you probably know, into original content, which is not cheap. it is looking to spend about $7 billion on movies and tv shows next year. wall street on board with the new prices, sending shares up 5%. netflix and other nontraditional media companies are taking on the traditional players in hollywood. and the question for investors is, who will win the future of video? julia boorstin recently talked to some of the industry's decisionmakers at the vanity
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fair summit in bev. >> reporter: with cord cutting on the rise and tv ratings on the decline, disney is working to go direct to consumer. ceo bob iger explaining the company's plan to launch a direct to consumer espn app early next year, followed by a disney app in the second half of 2019. >> i think a lot of the dialogue about this, a lot of the debate, a lot of the rhetoric is due to the fact that the business is feeling the pressure of disruption. it's just a lot of change and a lot of uncertainty. and a lot of tension that exists between the traditional players in the business, or among the traditional players, as consumers have more choice, as new distributors come into the market, as new producers come into the market. i think that's what's going on. you know, i feel great about where we have ended up. >> reporter: and hbo's richard pueblo says the investment in giving consumers digital options is paying off. that combined with hbo's content is keeping consumers hooked, despite the explosion of
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competition from netflix, amazon and others. >> we're getting about 25 to 30% of our viewing on different platforms. that's why we built hbo go originally. hbo now affords you the opportunity to watch it set or platform you want. we want our consumers to have options and we want them to have options that give them flexibility. >> reporter: now as the traditional media giants invest more in digital, we're seeing the tech giants invest more in content, with facebook funding its new watch platform and amazon spending more on shows and sports for its prime video subscription service. amazon extremely its first nfl game last night, spending $15 million for 11 games this season. amazon's svp who oversees content says they're interested in doing more of their critically acclaimed shows like "transparent" as well as bigger content investments.
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>> we're trying to make these big, broad shows that all customers around the world, we're in 200 countries now with the service, will want to watch. we think we have a few of those now. but we would like to have even more. >> reporter: he says amazon wants the best content like "game of thrones" and they're willing to pay for it. for "nightly business report," i'm julia boorstin in beverly hills. >> i'm so glad you're back. no more wandering. >> a lot of traveling. we hope to see you right back here, job ♪
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>> this is "bbc world news america." >> funding of this presentation is made possible by the freeman foundation and kovler foundation, pursuing solutions for america's neglected needs. >> planning a vacation escape that is relaxing, inviting, and exciting is a lot easier than you think. you can find it here, in aruba. families, couples, and friends can all find their escape on the island with warm sunny days,


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